NSE LIVE! Equities relapse with N21bn loss

After five days of consecutive positive trading session, Nigerian equities relapsed into the negative on Tuesday as investors sought to take profit from the recent rallies.

With 24 losers to 13 gainers, the market became overtly bearish with momentum of activities slowing down below recent average.

The All Share Index (ASI)-the value-based common index that tracks share prices at the Nigerian Stock Exchange (NSE), declined by 0.44 per cent to close at 25,558.57 points as against its opening index of 25,671.55 points. Aggregate market value of all quoted equities dropped by N21 billion from its opening value of N8.882 trillion to close at N8.843 trillion. The average year-to-date return worsened to -4.90 per cent.

Total turnover also slowed down below average with the exchange of 153.72 million shares valued at N1.50 billion in 2,675 deals. United Bank for Africa (UBA) was the most active stock with 51.9 million shares worth N276.7 million. Custodian and Allied followed with 19.2 million shares worth N9.61 million while Dangote Sugar Refinery ranked third with 15.2 million shares worth N93.9 million.

Most sectoral indices also closed in the negative, underlining the widespread losses. The NSE Banking Index dropped by 2.0 per cent. The NSE Insurance Index fell by 0.3 per cent. The NSE Oil & Gas Index fell by 0.04 per cent while the NSE Consumer Goods Index dipped by 0.1 per cent. Meanwhile, the NSE Industrial Goods Index recorded a marginal gain of 0.05 per cent.

Guinness Nigeria led the losers with a loss of N3.15 to close at N60.03. Forte Oil declined by N1.30 to close at N46.53. Ecobank Transnational Incorporated dropped by 40 kobo to close at N9.40. Cadbury Nigeria lost 39 kobo to close at N7.44. Guaranty Trust Bank slipped by 36 kobo to close at N26.79. Zenith Bank declined by 35 kobo to close at N13.65. United Bank for Africa lost 16 kobo to close at N5.31 while Africa Prudential Registrars and Nigerian Aviation Handling Company dropped by 10 kobo each to close at N2.28 and N2 respectively.

Read also: NSE LIVE! Large-cap stocks boost equities to N4bn gain

On the positive side, Mobil Oil Nigeria led the gainers with a gain of N4.99 to close at N298.99. Julius Berger Nigeria rose by N2 to close at N40. Total Nigeria added 45 kobo to close at N275. Nascon Allied Industries chalked up 32 kobo to close at N7.12 while Cement Company of Northern Nigeria added 20 kobo to close at N4.70 per share.

“We expect market performance to continue to be driven by short-term speculative activities whilst investors await secular macro triggers,” Afrinvest Securities stated.

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) on Tuesday concluded its second meeting this year with a decision to maintain the existing monetary policy rates, aligning with the expectations of most analysts.

The apex bank thus retained the Monetary Policy Rate (MPR) at 14 per cent with the asymmetric window at +200 and -500 basis points around the MPR, Cash Reserve Requirement (CRR) at 22.5 per cent and Liquidity Ratio (LR) at 30 per cent.

Most analysts had expected the apex bank to maintain status quo. According to analysts at Afrinvest Securities, the apex bank would maintain status quo on all rates while trying to consolidate on the gains of recent improvements that have been recorded in inflation, parallel market foreign exchange rate, increase in oil production and the release of Economic Recovery and Growth Plan (ERGP) by the fiscal authority.

“Although both the inflation rate and foreign exchange rate have shown signs of improvement in the last few weeks, a change in monetary policy might be too soon. We believe more time is required before a monetary policy change can be effective under the current situation,” FSDH Merchant Bank Limited stated in a prognosis for status quo.

“The implication on the markets, should the MPC maintain status quo, is expected to be neutral given that most foreign investors are staying on the side-line at the moment against the backdrop of an inefficient foreign exchange market.

Currently, the equities market remains quiet and driven only by short term speculative trading and fundamentally attractive earnings release. In the fixed income market, we expect investor appetite to remain tilted towards shorter term government securities given the high yield offering which tends to off-set current inflation risk and also inflation expectation,” Afrinvest Securities stated.

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